Investment Rating - The report maintains an "Accumulate" rating for China Southern Airlines (600029) [1] Core Views - The company reported a revenue of 174.2 billion yuan in 2024, an increase of 8.9% year-on-year, while the net profit attributable to shareholders was a loss of 1.696 billion yuan, reducing losses by 59.7% [2][7] - The airline's capacity (ASK) increased by 14.7% year-on-year, with domestic ASK up by 2.4% and international ASK recovering to 82.4% of 2019 levels [4] - Passenger load factors improved significantly, with overall load factor at 84.4%, up 6.3 percentage points year-on-year, and domestic load factor at 84.7%, up 6.8 percentage points [4] - The average ticket price in the industry fell by 12.1% year-on-year, impacting overall profitability, while the company’s unit revenue per RPK decreased by 12.7% [5] - The report highlights a positive outlook for ticket prices in the second and third quarters of 2025, driven by limited supply and increasing travel demand [6] Summary by Sections Financial Performance - In 2024, the company achieved a total revenue of 174.2 billion yuan, with passenger and cargo revenues of 149.7 billion yuan and 18.7 billion yuan, respectively, marking increases of 7.4% and 22.4% year-on-year [7] - The company’s net profit is projected to improve significantly in the coming years, with estimates of 4.223 billion yuan, 6.460 billion yuan, and 8.015 billion yuan for 2025, 2026, and 2027, respectively [9] Operational Metrics - The fleet size reached 917 aircraft by the end of 2024, with a net increase of 9 aircraft during the year, and fleet utilization improved to 9.62 hours per day [4] - The report indicates that the company’s operational recovery is evident, with gross margin expected to rise and profitability elasticity becoming more pronounced [2][6] Market Outlook - The report suggests that the airline industry is likely to see a recovery in ticket prices due to increasing travel demand and limited supply, which could enhance profitability [6][9] - The company is positioned to benefit from a balanced supply-demand scenario, with ticket prices expected to rebound as travel demand grows [9]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance in relation to the benchmark index [9]. Core Views - The company reported a revenue of 174.2 billion yuan in 2024, reflecting a year-on-year increase of 8.9%, while the net profit attributable to shareholders was a loss of 1.696 billion yuan, a reduction in loss by 59.7% compared to the previous year [7][9]. - The report highlights that the average ticket price in the industry decreased by 12.1% year-on-year, impacting the overall profitability of the passenger transport business, while the cargo business experienced significant growth [5][9]. - The company is expected to see a recovery in profitability due to limited supply growth and increasing travel demand, which may support ticket prices in the future [6][9]. Summary by Sections Operational Performance - In 2024, the total Available Seat Kilometers (ASK) increased by 14.7%, with domestic ASK up by 2.4% and international ASK recovering to 82.4% of 2019 levels [4]. - The total Revenue Passenger Kilometers (RPK) rose by 23.9%, with domestic RPK increasing by 11.3% and international RPK recovering to 83.3% of 2019 levels [4]. - The overall passenger load factor reached 84.4%, up by 6.3 percentage points year-on-year, with domestic and international load factors at 84.7% and 83.3%, respectively [4]. Financial Performance - The company achieved a gross margin of 8.4% in 2024, with expectations for further improvement in the coming years [8]. - The report forecasts net profits for 2025-2027 to be 4.223 billion, 6.460 billion, and 8.015 billion yuan, respectively, with significant year-on-year growth rates [9]. - The earnings per share (EPS) are projected to be 0.23, 0.36, and 0.44 yuan for the years 2025, 2026, and 2027, respectively [9]. Market Outlook - The report anticipates that the airline industry will face limited supply growth in 2025, which, combined with increasing travel demand, could lead to a rebound in ticket prices [6][9]. - The company is positioned to benefit from this market dynamic, with a potential for high elasticity in ticket pricing as demand increases [6][9].